RERA Regulation 9 Valid; Banks and SARFAESI: Rajasthan HC

RERA Regulation 9 Upheld; Banks Taking SARFAESI Measures Answerable to RERA: Rajasthan High Court

Published: 18 October 2026 · NyayVidhan

The Rajasthan High Court upheld Regulation 9 of the Rajasthan Real Estate Regulatory Authority Regulations, 2017, which lets RERA have complaints decided by single-member benches, and held that such delegation also flows from Section 81 of the Act (paras 20, 36). Deciding 70 petitions together, it held that RERA prevails over the SARFAESI Act, does not reach mortgages created before the Act unless fraudulent or collusive, and can hear complaints against a bank once it takes Section 13(4) measures (para 36).

Key holdings

Regulation 9 of the 2017 Regulations is not ultra vires the RERA Act or otherwise invalid (paras 20, 36).

Single-member adjudication flows from Section 81 even without Regulation 9, following Newtech Promoters (paras 18, 20, 36).

In a conflict between RERA and the SARFAESI Act, RERA prevails, as held in Bikram Chatterji (paras 23, 36).

RERA does not apply to mortgages created before the Act unless they are fraudulent or collusive (paras 25-26, 36).

A bank taking any Section 13(4) measure steps into the borrower's shoes and becomes amenable to RERA complaints (paras 29, 35-36).

Case explainer by NyayVidhan: an account of this judgment and the law it laid down, not the court's text. The judgment itself is the authoritative version.

Brief Facts

Seventy writ petitions, by promoters facing allottees' complaints before RERA and by banks wishing to enforce their security under the SARFAESI Act, were heard together, Regulation 9 being the focal point (para 1). In the lead petition, Union Bank of India challenged Regulation 9, RERA's resolution of 25.09.2020 that complaints would usually be heard by single benches, and a single member's order of 20.09.2021 on an unfinished 38-flat complex mortgaged to it (paras 2-3, 15). The allottees alleged that the developer had fraudulently mortgaged the project to Andhra Bank, now merged into Union Bank, around 04.06.2016; RERA treated the bank as the promoter's assignee (para 3). The bank denied RERA's jurisdiction over it and over pre-Act mortgages (para 4).

Court's Findings

In Newtech Promoters the Supreme Court upheld delegation to a single member under Section 81, so the Punjab and Haryana view in Janta Land Promoters, relied on by the petitioners, lost much of its significance (paras 18-19). Recourse to Regulation 9 became academic: the resolution could rest on Section 81, and Regulation 9, framed under Section 85, merely regulates the process of delegation (para 20). Of the two non obstante clauses, the later law ordinarily prevails, and Bikram Chatterji held that RERA prevails over SARFAESI (paras 21-23). Section 11(4)(h), barring a promoter from mortgaging after an agreement for sale, creates a new obligation that cannot operate retrospectively and would reopen closed loan transactions (paras 24-25). Bikram Chatterji applied RERA to earlier transactions only because the mortgages were fraudulent, and Newtech's answer on ongoing projects cannot be adopted straightaway for secured creditors (paras 26-27). Complaints under Section 31 lie against a promoter, allottee or real estate agent, and ‘promoter’ includes assignees (para 29). Taking any Section 13(4) measure puts the bank in the borrower's shoes by statutory assignment, so RERA can then entertain complaints against it (paras 34-35).

Legal Principle

A regulation that only regulates how a regulatory authority delegates adjudication to single members is procedural and valid where the parent Act permits delegation. RERA overrides SARFAESI but does not reopen security interests created before the Act, absent fraud or collusion; a bank enforcing security under Section 13(4) becomes answerable to RERA (paras 20, 25-26, 35-36).

Precedents Relied Upon

M/s Newtech Promoters and Developers Pvt. Ltd. v. State of UP and Ors. Civil Appeal No(s). 6745-6749/2021, decided on 11.11.2021
Followed Discussed at ¶ 6, 17-20, 27
Relied on by the allottees and the Authority; the Supreme Court upheld delegation to a single member of RERA under Section 81 to decide complaints under Section 31, which substantially governs the challenge to Regulation 9; its answer on the Act's application to ongoing projects was held not to cover pre-Act security interests of secured creditors.
Bikram Chatterji and Ors. v. Union of India and Ors. 2019 19 SCC 161
Followed Discussed at ¶ 3, 6, 23, 26, 36
Relied on by RERA and the respondents; followed for the rule that RERA prevails over the SARFAESI Act; explained as applying RERA to pre-Act transactions only because the mortgages there were fraudulent.
West Bengal Electricity Regulatory Commission v. CESC Ltd. (2002) 8 SCC 715
Relied Upon Discussed at ¶ 22-23
Relied on for the principle that where two statutes carry non obstante clauses, the later special law ordinarily prevails.

View all precedents (5)

Janta Land Promoters Private Ltd. v. Union of India and Ors. 4 RCR (Civil) 845 (Punjab and Haryana High Court, Division Bench, 16.10.2020)
Not Followed Discussed at ¶ 17, 19
Relied on heavily by the petitioners; it held a similar delegation regulation invalid, but it lost much of its significance because the contrary Allahabad High Court view was approved by the Supreme Court in Newtech Promoters.
M/s K.D.P. Build Well Pvt. Ltd. v. State of U.P. Allahabad High Court, decided on 04.02.2020
Referred To Discussed at ¶ 17, 19
Noted as holding an order passed by one member of RERA legal and valid in the light of Section 81; its view was followed by the Allahabad High Court in Newtech Promoters, which the Supreme Court approved.